Transformations  in
Business & Economics

BUSINESS POTENTIAL OF RURAL AREAS AS A TOOL OF STABILITY AND DEVELOPMENT OF SMALL AND MEDIUM-SIZED ENTERPRISES
Petra Partlova

ABSTRACT. Knowledge of the business potential of a territory is a prerequisite for the objective setting of activities performed in the area. The current research on small and medium-sized enterprises (SME) confirms this premise. Business potential, which is a subject of this paper, is defined by four pillars: economic, infrastructural, social, and environmental pillar. Methodology or proposed calculation of economic potential is presented on a model area, with the basic administrative division being a municipality. The individual pillars were tested using the clustering method (Clustering municipalities), which resulted in creating four territorial clusters. Stepwise backward regression was used to test the significance of factors in the clusters in terms of their effect on the economic potential of the territory. To determine a significant dependence of financial health of a company in individual clusters under review, the Neumaiers' bankruptcy model of IN95 was used. Dependence between company creditworthiness and environmental value of a cluster, financial health of a company and respected natural limits of territory including the intensity of using the economic potential in both directions of its exploitation was identified. In further research, the researchers shall focus on refining the process of collecting and processing data for analytical work as well as the structure of parameters of individual economic potential pillars in terms of their classification into basic and specific parameters while respecting the character of individual regions .

KEYWORDS:  small and medium-sized enterprises, business potential, infrastructural, social and environmental parameters of a territory, clustering, Stepwise backward regression, creditworthiness of a company, rural areas.

JEL classification:  L29, O21, C40.